On July 14 last year, the RBI had announced the restrictions on Mastercard citing non-compliance with payments data storage rule
As per the ‘Storage of Payment System Data’ rules introduced in 2018, all foreign payment operators are required to ensure that the entire data relating to payment systems are stored in a system only in India
Last year, the central bank had also imposed similar restrictions on American Express and Diners Club International
The Reserve Bank of India (RBI) has lifted the business restrictions on global payments technology company Mastercard almost a year after it barred it from issuing new debit and credit cards to domestic customers for violating data storage rules.
“In view of the satisfactory compliance demonstrated by Mastercard Asia / Pacific Pte. Ltd. with the Reserve Bank of India (RBI) circular dated April 6, 2018 on Storage of Payment System Data, the restrictions imposed, vide order dated July 14, 2021, on on-boarding of new domestic customers have been lifted with immediate effect,” the RBI said in a statement on Wednesday (June 16).
On July 14 last year, the central bank had announced the restrictions on Mastercard citing non-compliance with payments data storage rules.
“Notwithstanding the lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on Storage of Payment System Data,” the RBI had said then.
As per the ‘Storage of Payment System Data’ directions issued in 2018, all foreign payment service providers are required to ensure that the entire data relating to payment systems are stored in a system only in India. This data is supposed to include the full end-to-end transaction details/information collected/carried/processed as part of the message/payment instruction.
“For the foreign leg of the transaction, if any, the data can also be stored in the foreign country, if required,” as per the directions.
The central bank’s restriction on Mastercard followed similar action by it against American Express and Diners Club International, owned by Discover Financial Services, last year.
The relaxation on Mastercard’s business operations comes at a time when the RBI is tweaking and tightening rules for various stakeholders in the finance ecosystem, especially the fintech businesses.
The central bank is already making a regulatory framework for digital lenders as the number of complaints against such lenders are on a rise.
The RBI also introduced card tokenisation guidelines in 2020 with an aim to improve the safety and security of card transactions. Following two extensions in the deadline for implementing tokenisation, the new rules are proposed to come into effect from July 1 this year.
